Selling through online platforms and MTD for Income Tax
acrenvo.com/guides/mtd-selling-on-online-platforms, last reviewed 12 October 2026
Dev is fictional. He works in a warehouse, and for the past couple of years he has bought trainers in the sales and sold them on through online marketplaces. Last calendar year he made 45 sales, and over the tax year his sales came to £14,500. Then a marketplace emailed to say it had sent his details to HMRC, and he wants to know what that means, and whether Making Tax Digital (MTD) for Income Tax is part of it.
Two separate sets of rules are at work here. The platform reporting rules decide what a marketplace tells HMRC about you. Whether you owe tax, and whether you use MTD, depend on what kind of selling you do and how much it brings in, and this guide takes each in turn.
What the platforms report
New rules started in the UK on 1 January 2024. If you sell on digital platforms, the platform operator may need to collect and check specific details about you and report details to HMRC. As an individual seller, the platform will ask for your:
- full name
- address where you normally live
- date of birth
- tax identification number (National Insurance number if you live in the UK)
Digital platform operators in the UK will report your details and your income from selling goods or services on their platform to HMRC. They need to collect this information yearly and send to HMRC by the following January. GOV.UK’s example is that information collected during 2024 is reported by 31 January 2025.
Your details will not be reported if you:
- make fewer than 30 sales of goods in a calendar year
- receive less than 2,000 euros (which GOV.UK puts at about £1,700) for those sales
GOV.UK lists the two points below which a platform will not report your details, but it does not say whether both must apply or either one is enough.
Platform operators have to give you a copy of the information they have reported to HMRC. The report will show you the total amount that you have earned on the platform for the calendar year, less any fees, commission or taxes deducted by the platform. The amounts will be broken down into quarters of the calendar year.
A report does not mean you owe tax
A platform reporting your details to HMRC does not automatically mean you owe tax. To pay tax on the goods or services you sell online, you must either be trading or making a capital gain. You’re unlikely to pay tax if you sell personal items from your home, like contents of a loft or garage.
If you’re selling personal possessions you probably do not have to pay Income Tax on these. If you sell an item for more than £6,000, you may need to pay Capital Gains Tax.
Selling things you bought or made to sell on is treated differently. You’re probably trading if you sell goods that you have:
- bought intending to sell for a profit
- made, including items you make for a hobby
If you buy or make goods to sell at a profit, you’re likely to be trading and will have to pay tax on your profits. If you received gifts or services instead of money, you would use the value of what it would have cost if you had to pay for them.
Adding it up for the tax year
You’ll need to add together this income with your income from other trading activities, such as providing services or creating online content. The trading allowance is £1,000, and if your total income is more than the trading allowance for the tax year (6 April to 5 April), you’ll need to tell HMRC about it. The guide to the trading allowance explains what the allowance covers and when you need to register.
These reports do not replace your normal business records or tax calculations. Because a platform’s report covers the calendar year, the figures you give HMRC have to be worked out for the tax year instead.
Dev buys trainers to sell at a profit, so he is likely to be trading. His £14,500 for the tax year is more than the £1,000 allowance, so he needs to tell HMRC about it, and GOV.UK’s online platforms guidance has a tool to check how.
How selling online relates to MTD for Income Tax
GOV.UK’s pages on online platforms do not mention Making Tax Digital for Income Tax. What links the two is how MTD measures income. Qualifying income is your total income from self-employment and property, before expenses (also known as turnover), based on the tax return you submitted in the previous tax year. If your selling is trading, we read its income as self-employment income, which would count alongside any other business or rental income you have.
Dev’s £14,500 is not over £20,000, the lowest MTD threshold, so MTD for Income Tax does not apply to him yet. If your income is above the relevant threshold HMRC will write to you, confirming that you need to start using Making Tax Digital for Income Tax by the start of the following tax year. The guide to going over £20,000 explains which tax year HMRC looks at.
If you do join, the dates will not line up on their own. A platform report is split into quarters of the calendar year, while MTD quarterly updates follow the tax year, which starts on 6 April. Keeping your own records by date means you can build either set of figures from them. When you are ready to choose a way of keeping them, the guide to the lowest-cost ways into MTD lists every free plan among the products we compare.
Questions people ask about online platforms and MTD
Will an online platform tell HMRC about my sales?
It may, depending on how much you sell. Digital platform operators in the UK will report your details and your income from selling goods or services on their platform to HMRC. They need to collect this information yearly and send to HMRC by the following January. Platform operators have to give you a copy of the information they have reported to HMRC.
Does a platform report mean I owe tax?
Whether you owe tax depends on what kind of selling you do. A platform reporting your details to HMRC does not automatically mean you owe tax. To pay tax on the goods or services you sell online, you must either be trading or making a capital gain. You’re unlikely to pay tax if you sell personal items from your home, like contents of a loft or garage.
My platform shows a calendar year. Which figures do I use?
You use figures for the tax year, because HMRC works in tax years. The report will show you the total amount that you have earned on the platform for the calendar year, less any fees, commission or taxes deducted by the platform. The amounts will be broken down into quarters of the calendar year. If you do need to tell HMRC about your income, you’ll need to work out your income for the tax year (6 April to 5 April).
Does selling online count towards MTD qualifying income?
It can, if your selling is trading. GOV.UK’s pages on online platforms do not mention Making Tax Digital for Income Tax. Qualifying income is your total income from self-employment and property, before expenses (also known as turnover), based on the tax return you submitted in the previous tax year. If you buy or make goods to sell at a profit, you’re likely to be trading and will have to pay tax on your profits.
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Sources
This is general information, not tax advice. For advice on your own situation, speak to an accountant or tax adviser.